What Is It Worth? Putting a Value on Intellectual Property

• Author: Alexander I. Poltorak/Paul J. Lerner
• Profession: Is the founder, Chairman, and CEO of General Patent Corporation (GPC), an intellectual property (IP) firm focusing on intellectual property strategy and valuation, IP licensing, and enforcement/Is the Senior Vice President and General Counsel of General Patent Corporation (GPC)
• Pages: 70-82

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CHAPTER 5

What Is It Worth?

Putting a Value

on Intellectual

Property

After reading this chapter, you will be able to:

Understand the various IP valuation models.

Understand how factors such as infringement, cor porate

culture, national culture, and the patentee’s ability to

enforce patent rights can affect patent value.

Having devoted such effort to creating, identifying, and protecting

intellectual property, the reader is probably wondering what it is

worth. (If not, the reader should be.) Certainly, venture capital-

ists, bankers, shareholders, and other investors—actual or potential—are

asking this question.

Valuation Models

Intellectual p roperty (IP), li ke any property that is bought and sol d,

is worth what it will bring in the market. In the absence of an effi-

cientmarket(amarketwithmanybuyers,manysellers,andfreely

available information as to prices) for trading technologies, it may

be quite difficult to ascertain what the market value of a particular

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